Christmas Crypto Price Prediction – Santa’s Rally? Discharge of collection of tax losses?
Traders often predict that these two catalysts will drive crypto prices up or down in December – a “Santa Rally” and a harvest of tax losses.
Both terms are older than cryptocurrency, commonly discussed by stock traders at the end of each fiscal year. How accurate are they for making stock or crypto price predictions?
Pentoshi on Crypto Price Stories
One of the most popular crypto Twitter accounts, @Pentoch1 posted to its 657,000 subscribers to look forward to these two “stories” in December.
He added Wall Street bonuses, like many in the replies, and Chinese New Year as the narrative of 2023 for crypto prices. Many holders from the 2018 bear market will remember these insights.
Although he has yet to expand on this tweet thread in November, Pentoshi has criticized this type of fundamental analysis in previous years, saying “just trading the charts” and “what matters is the trend. “.
Last Christmas for example, Pentoshi tweeted the image below and his comments that bad traders rely on stories:
Santa’s Rally Data:
Fact: It’s a pure case of bad traders + sub bag carriers
Where is the magical institutional auction and volume that was coming this week? After risking for EOY, but would they risk going for it? It’s you against the charts. Stories = scam.
Investopedia explains the justification for a gathering of Santa Claus as a ‘general feeling of optimism and seasonal happiness on Wall Street, and the investment of holiday bonuses‘.
The theory dates back to Yale Hirsch’s Stock Trader’s Almanac written in 1972.
Collection of tax losses
Tax loss harvesting is defined as the sale of assets to ‘limit the amount of tax payable on short-term capital gains, which are generally taxed at a higher rate than long-term capital gains‘.
Last December, Pentoshi noted that one narrative was that institutions would sell until the last business day of the month and then crypto markets would rally.
However, Bitcoin’s price action was bearish at the close of 2021, with the overall bearish macroeconomic trend being the deciding factor.
In July 2022 Pentoshi makes an interesting prediction that more funds will “blow up” – the kind that focus on these kinds of crypto price stories.
Russian oligarchs, tax harvest, etc. Most of these stories were from the same VCs, TradFi guys, and funds that have exploded or will explode in a few months.
Earlier this month it emerged that Sam Bankman-Fried’s Alameda Research was insolvent and had lost $3.7 billion during the 2021 bull cycle.
The FTX exchange-linked fund was previously imagined by many to be made up of expert traders and quants.
Bitcoin Price Predictions
Heading into December, Bitcoin is trading sideways, stuck in a 2% range at the time of writing around $16,500.
Since hitting an all-time high of $69,000 on Binance against USDT in November 2021, Bitcoin has crashed to $15,476 a year later, a 78% correction.
On the downside, some analysts predict that the $12,000-$14,000 level could be tested as support.
The 2019 high was $13,970 – plotted on the Bitcoin price chart above, just above the 2018 yearly open of $13,715.
Pentoshi is unsure if Bitcoin will see a capitulation event and fall that low.
He predicts no more sideways accumulation, for an extended period of time – neither a Santa Claus rally nor a tax-loss sale.
On the upside, some traders are predicting that a bear market rally could take Bitcoin price as high as 2021 lows for a bearish retest. The June 2021 monthly wick reached $28,805.
Pentoshi’s crypto price predictions are similar to that of another top trader @SmartContracter – that Bitcoin could move in a tighter range until 2023.
Best Crypto to Buy Now for the Upcoming Bull Run
While most of his tweets offer technical analysis on short-term, long-term price action, one of Pentoshi’s predictions is that NFT and gambling related crypto tokens are a good investment. Today he tweeted:
NFT has gotten more people into crypto than anything else and NFT combined with gaming will have so many advantages in the next imo bull run. If I could pick one industry to be bullish on for adoption, this would be it. Passionate people and a helpful industry and community with a broad reach.
He has yet to name any specific altcoins or NFT collections.
Here has CryptoNews we followed the next Calvaria: Duels of Eternity Game which has now surpassed the $2 million mark in its token presale.
We also reported on RobotEra which is attracting early investor interest at the pre-sale stage.
Both are NFT-based games to win crypto games that are expected to be a hit with gamers in 2023. Find their whitepapers at:
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